UAE sees Indian workforce shrink as home salaries rise

Indias construction boom has decreased the labour pool for the Gulf states

By Claire Ferris-Lay

Tue 22 Nov 2011 09:40 AM

The Indian Consulate in the UAE saw a fall in new visas for Indian nationals last year for the first time, as rising salaries in the Asian state kept workers at home.

The Gulf state is likely to see a steady decline in blue-collar migrants as India’s economic growth offers better opportunities to workers, the Consul General told Arabian Business.

“Last year, for the first time ever, the Indian Consulate served less passports than in 2009 so that would be an indication that the number of Indians declined coming to the UAE,” Sanjay Verma said on the sidelines of the 5th Arabian Business Forum. “Passport services saw a two percent drop.

“The numbers are declining because of the demand for labour in India. The civil construction sector has a shortage of civil engineers and skilled workers, plumbing and carpentry.”

The Asian state has rolled out a National Rural Employment Guarantee Act which offers 100 days of work a year to rural households, giving employment to workers in villages who traditionally have looked abroad for jobs.

“The advantage of that is it is offered it to you in your home town or village so that has taken away some workers who otherwise would have come abroad,” Verma said.

The Gulf plays host to millions of migrants, primarily from Asia, who account for the majority of blue-collar workers in the construction, domestic work, and service industries.

An estimated three million migrate each year, sending back an estimated $175bn in remittances annually, according to Human Rights Watch data.

The UAE alone is home to an estimated 1.75 million Indian expatriates, the largest group of foreign workers in the Gulf country. But experts have warned the country may struggle to attract and retain migrants if it fails to keep pace with rising salaries in India.

Minimum wages for unskilled foreign workers in the UAE are as low as AED600 a month, with skilled workers receiving AED1,200 a month, according to the Indian Embassy, Abu Dhabi.

By comparison, wages in India, the world’s fastest-growing economy after China, surged by 11.1 percent last year, said recruitment firm GulfTalent in February.

The Indian Ambassador to the UAE said earlier this year the government planned to enforce a minimum wage for Indian nationals hoping to work in the UAE.

If approved, the ruling will mean workers only receive immigration clearance from India if their employment contract meets with a set minimum salary.

Verma said the professional sectors were likely to feel the pinch first as India strives to hold on to homegrown talent and keep pace with its fast-growing economy.

“It will be more expensive getting Indian workers. It’s already happening in the professional sector, it’s not as easy as it used to be to attract Indian doctors or accountants to come here.”

In 2011, the number of new visas issued by the consulate will be flat, he added.

“I think it’s going to be closer to 2010, probably the same as 2010 but not a drastic increase.”